One thing I’ve always been astonished by is how fast a winning strategy (in investing and in life!) can suddenly slam into a wall—and start causing a lot of pain.
Consider, for example, the life of a mortgage banker in the 2000s: They made easy money for years, then the subprime-mortgage crisis threw them out of work overnight.
This happens in investing, too, which is why it’s always good to stay humble and well-diversified. Some high-yielding closed-end funds (CEFs), for example, look like big winners at any given moment. But if you buy without looking under the hood, you’re risking sharp losses.
Which brings me to …
The Top-Performing CEF of 2025
The year isn’t over, but the ASA Gold & Precious Metals Fund (ASA) is so far ahead of other CEFs that it would take a miracle for it to be overtaken by year-end.
ASA’s Unbelievable Year
ASA is up 172% (!) in 2025, and it’s easy to see why: The CEF invests in miners of gold and precious metals, and gold has been on a tear. But the scale of its run is still breathtaking, as none of the 5 CEF subsectors tracked by my CEF Insider service have even cracked 15%.
Source: CEF Insider
So with that in mind, is ASA a buy now?
No way. For one, the fund yields just 0.1%, while the average CEF pays over 8.3%. So for us income investors, ASA is a no-go. Second, since gold miners’ share prices are tied directly to gold, ASA does well when gold soars, which happens every so often (such as in the past year), but these surges tend not to stick around.
We can see that last point in ASA’s long-term performance, in purple below, in relation to a popular S&P 500 ETF (in orange).
This Gold Fund Trails Stocks …
Over the last two decades, ASA has badly trailed the S&P 500 on a total-NAV-return basis (that is, by the performance of its portfolio, not its market-price-based return).
Worse, if you retired 20 years ago and bought ASA at that time with the intention of relying on it, many of your withdrawals would’ve cost you money, especially during the seven-year period in the 2010s when ASA (again in purple below) would’ve been mostly underwater for you.
Moreover, not only does ASA lag stocks in the long run, but it trails gold prices, too, shown in orange above by the performance of the gold-price-tracking SPDR Gold Shares (GLD) ETF, in orange, since that fund’s inception in late 2004.
… and Gold Prices, Too
The bottom line? If you’re looking for gold exposure, ASA is not the way to do it. In addition, the fund is a good illustration of why we avoid gold at CEF Insider: We’re looking for high current income first and foremost (our portfolio yields 9.5% on average), and there aren’t enough gold investments with yields high enough to excite us.
3 High-Yield Stock CEFs That Beat ASA
Looking beyond gold, there are many CEFs—on the stock and bond side, specifically—that beat ASA in terms of long-term outperformance and income. Below are three that all trade at attractive valuations, as well.
Both the Adams Diversified Equity Fund (ADX) and Liberty All-Star Equity Fund (USA) focus on stocks, including key blue chips like Nvidia (NVDA), Microsoft (MSFT) and Visa (V). And they give us those stocks at attractive discounts, with ADX sporting a 7.1% discount to NAV and USA trading about 10% below its portfolio value.
The 10.9%-yielding PIMCO Corporate & Income Opportunity Fund (PTY), meanwhile, is a corporate-bond fund that’s maintained a strong, and monthly paid, dividend since inception in 2002 (with regular special dividends).
PTY does trade at a 10.1% premium to NAV now, but that’s because it’s a PIMCO fund, and the firm has a sterling reputation in the small CEF world. And that 10.1% premium is actually a bargain, as it’s traded at a 19.7% average premium over the last 52 weeks.
These three funds get you a “mini-portfolio” yielding 10% on average, or roughly 90 times more than ASA. They’ve outperformed the gold CEF (in orange below) going back to 2003, the year that the youngest of these funds, USA, went through its IPO:
Top Bond and Stock CEFs Outrun ASA
Since then, ASA (in orange above) has delivered a return less than half the size of the other three, on average, while yielding basically nothing.
Of course, if we look only at 2025, we don’t see this: ASA looks like a big winner that is crushing the other three funds. That’s the risk investors face when they ignore history: a recency bias that can cost a lot of money.
Anyone making big profits today with ASA might feel like a big winner, and they are—for now. But over the long term, they have a strong chance of underperforming, especially if the fund reverts to the trend line it’s been on for decades. Worse, there’s no real income to tide shareholders over while they wait for ASA’s next rise.
Contrarians: These 8%+ “AI-Powered” Dividends Are My Top 2026 Buys
As we just discussed, gold, and gold-focused funds like ASA, are long overdue for a breather (or worse!). So we’re NOT chasing them as 2026 dawns.
But the sector we ARE buying as the new year breaks will likely surprise you: AI.
Not just AI stocks, but AI stocks (CEFs, to be specific) kicking out huge dividends! I’m talking about 4 specific funds throwing off 8%+ dividends as I write this.
Look, it’s impossible to ignore all the chatter about an AI bubble right now. I get it. But the bottom line is, corporate profits are still rising and American GDP is growing. This is NOT the opening act of a recession—it’s a boom in productivity!
And it’s still early days, too.
The trouble for us income investors is that “classic” AI stocks, like NVIDIA (NVDA), pay low (or no) dividends. Which is why we look to CEFs for our AI buys.
Through the 4 smartly run funds I’ll show you next, we’ll:
- Grab 8% average dividend payouts. That boosts our income and our margin of safety, too, as most of our return comes our way in cash.
- Buy at big discounts, further hedging our downside (and boosting our upside in the next surge). And most important …
- Buy into AI providers and AI users. That last group is critical, as the insurers, retailers, pharma companies, lenders and other firms that use AI will reap the most benefits from this new tech.
I’m ready to walk you through my latest insights on AI and give you the names of these 4 income (and growth) plays in a free Special Report. Click here to learn more and grab your copy.
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